Trump and Lee Clash Over $350B in U.S.-South Korea Trade Deal

South Korea and the United States have finalized a sweeping trade deal that imposes a flat 15% tariff on all South Korean exports to the U.S., down from the previously threatened 25%. But beyond the headline numbers, the two governments appear sharply divided on what the agreement actually means—especially regarding a promised $350 billion investment, according to CNBC.

President Donald Trump announced the deal on Wednesday, stating that South Korea would provide $350 billion for investments “owned and controlled by the United States, and selected by myself, as President.” He claimed “90% of the profits” would go “to the American people,” echoing similar language used in his recent deal with Japan, which included a $550 billion investment.

However, President Lee Jae-Myung offered a different interpretation. In a Facebook post, Lee said the investment would facilitate Korean companies’ entry into the U.S. market across sectors such as shipbuilding, semiconductors, secondary batteries, biotechnology, and energy. He noted that $150 billion would be earmarked for shipbuilding cooperation. Lee emphasized the need for “mutually beneficial outcomes,” stating the deal should not be about “pursuing unilateral gains.”

The differing narratives follow a similar pattern seen in the U.S.-Japan agreement, where Tokyo later clarified that profits would be divided based on each country’s contributions—contrary to Trump’s framing.

Trump also said South Korea had agreed to purchase $100 billion in U.S. liquefied natural gas (LNG) and other energy products. He added that further investments would be disclosed during Lee’s planned summit in Washington within the next two weeks. Trump confirmed that U.S. goods will not face any new tariffs. As of 2024, South Korea’s effective tariff rate on U.S. imports was just 0.79%.

In 2024, total U.S. trade with South Korea reached $197 billion, with a $66 billion trade deficit, up 29.2% from the previous year.

In his public remarks, Lee Jae-Myung said the agreement would enhance industrial cooperation and strengthen the U.S.-Korea alliance, while reaffirming that “diplomacy centered on national interest” would remain Seoul’s guiding principle. U.S. Commerce Secretary Howard Lutnick added that South Korea would not be treated worse than other countries in sectors like semiconductors and pharmaceuticals, though steel, aluminum, and copper exports would remain subject to existing 50% tariffs.

Louise Loo, head of Asia economics at Oxford Economics, called the fixed 15% auto tariff “a win for President Lee,” but cautioned that duties on electronics and semiconductors could still rise. Following the announcement, South Korea’s Kospi index rose 0.5%, and yields on 10-year government bonds edged slightly higher.